Corning To Acquire 3M Comms Division For $900M
Acquisition aims to strengthen market reach and expand high-bandwidth portfolio
Corning has entered into agreements with 3M to purchase most of 3M's Communication Markets Division in a cash transaction valued at approximately $900 million.
The acquisition, which is expected to close during 2018, will augment Corning's optical communications market access and expand its portfolio of high-bandwidth optical connectors, assemblies, hardware, and accessories for carrier networks, enterprise LAN, and data centre solutions.
Corning's Optical Communications segment will acquire approximately $400 million in annual sales of high bandwidth and optical fibre products. The effective enterprise value of the transaction is less than seven times the Communication Markets Division's estimated forward-annual adjusted EBITDA, including expected run-rate synergies. Corning expects the transaction to add $0.07-$0.09 to 2019 EPS.
"Corning leads in optical passive components and solutions. This transaction expands both our global market reach and our high-bandwidth portfolio. It also provides new co-innovation opportunities and enhances our ability to serve customers globally," said Clark S. Kinlin, executive vice president, Corning Optical Communications. "As the industry's only true end-to-end manufacturer and supplier of optical solutions, we look forward to bringing these two strong organisations together and welcoming a group of outstanding employees."
The pending acquisition is part of Corning's multi-year Strategy and Capital Allocation Framework, which aims to invest approximately $1 billion to $3 billion in acquisitions.
3M's Communication Markets Division is headquartered in Austin, Texas, and has a dedicated manufacturing facility in Pontchâteau, France, and operations in Hannover, Germany.